Socio-Economics & History Commentary

Madness in the Physical Silver Market by Perpetual Assets , 22 July 2015On July 7 we noted the almost $1 drop in silver and subsequent announcement by the US Mint of a suspension of sales. We referenced the story of that day in an article posted HERE. –Since that day business has been booming. The interest in physical is like nothing I’ve seen before. Here we are 15 days later and Silver spot price is still around $15, or slightly under! What’s most interesting has been the development of inventory shortages and production bottlenecks as it pertains to products, and corresponding mints.–The day of the announcement we saw an immediate $1 jump in American Silver Eagle premiums, more than making up for the $1 drop in spot price. Since then we have been forced to price silver eagle premiums daily and stay on top of inventory delays.–For the first week we had 2 prices for eagles. Eagles live (in stock) were $0.75 more than those pushed out 2-3 weeks to an August delivery. In the last week, we’ve had none available for live delivery. All eagles orders are now pushed out into August.–Last week we learned that the supplier of blanks to the US Mint, also the largest blank silver coin supplier in the country, is backed up on blanks until mid September. Now basically all silver products are delayed 2-3 weeks, not just eagles, bars, rounds, everything.–And just today we got the below announcement from a very large wholesale supplier:–WE ARE SOLD OUT OF SILVERAt this time our office is not offering silver product for sale.
We have now crossed a line where we are more than thirty (30) days out on new orders of manufactured product.–Once we get caught up we will offer more product for sale.All current orders are on schedule.–
We apologize for this inconvenience but feel it is not safe business
nor good business for us to short product past our comfort level of thirty (30) day delivery.~~~~~We sincerely respect this announcement as this company is turning away new business just to allow the market to get caught up. –We believe this is proof of the severe strain on the physical silver market. Many argue silver and gold prices will fall further in the short term, and we agree. We have yet to see a stock market collapse. When we see a massive selloff across many asset classes including equities and bonds it is very likely spot gold and silver prices will fall. As we’ve said in the past, we do not believe physical metals will be attainable once this happens. We believe the events of the last two weeks have proven it.

Published on Jul 22, 2015 Syriza party rebels against Tspiras. He is looking to completely overhaul the government. Russia is now saying that Greece never asked for 10 billion dollars to back the Drachma. Debt in Europe hits an all time new high. Catepillar has now 31 months of negative sales. Retail Federation lowers expectations for the rest of the year. 57% of Americans feel the economy is getting worse. The economic data points to a major economic collapse, which is headed our way. Existing homes sales increase but mortgage applications decrease, something is wrong. Gold is slammed down and China and Russia accumulate even more gold. Chattanooga shooter was on SSRI’s, the common thread of all other shootings.

Published on Jul 20, 2015SGT Report welcomes V, the guerrilla economist from Rogue Money.net to the show to discuss the end of the western banking and precious metals price suppression paradigm. –On Sunday night the banking cartel struck again by flooding the world market with paper gold, slicing $50 off the price within fractions of a second. But this is a paradigm that will soon come to an end according to V. “These morons could drive down the price of gold in the paper markets down to the pennies. It doesn’t matter, because what’s happening is a paradigm shift that cannot be stooped… The West is an Emperor with no clothes.” –V goes on to quantify it by explaining the massive onslaught of infrastructural and physical precious metals entities coming on line in Asia in the very near term. “You have the Eurasian trade zones, Global South, SCO, the BRICS, AIIB… these are paradigm altering SYSTEMS that are coming online, and it’s all happening this fall.” –We also discuss the overt tyranny of the US government, from unconstitutional treaties to mandatory vaccinations – it all adds up to the end of America unless we the people stop it.

Comex Paper Precious Metals Open Interest Is Going Parabolicby http://investmentresearchdynamics.com/Since the end of May open interest has risen 14.23% while gold basis the stock market close has fallen 2.69%. Gold has been battered by a powerful short-selling campaign. MKS Geneva last night furnished the colorful remark: “Shorts grew 12% last week to a new all time high. The position is about 3.6 times the size of the last 20 years average!!”
– from John Brimelow’s Gold Jottings Report –The price level and trading activity in the precious metals market – gold and silver specifically – has reached mind-blowing absurdity. Make no mistake about it, the fact that the U.S. mint had to suspend sales of 1 oz Silver Eagles until at least early August is definitive evidence that the natural market function of price as a mechanism to balance supply/demand has been completely destroyed by the western Central Banks using the big bullion banks as their agents of manipulation.–As we already know, the silver open interest on the Comex has soared to preposterous levels to an open futures level which far exceeds the amount of silver produced by mines globally in a year: (chart top of post)–
As you can see from this graph to the left, the open interest in silver is historically correlated with the directional price movement of silver. This correlation blew up and the amount of paper silver open interest on the Comex began to go parabolic last summer, while the price continued to head south. This is direct evidence that that Comex paper silver is being used to push down the price of silver.–read more.

Rob Kirby: World Domination by Bankers at Stake in Greece by Greg Hunter’s USAWatchdog.comMacroeconomic analyst Rob Kirby thinks that everybody should take notice of what is happening with the Greek debt crisis drama. Kirby contends, “What has occurred in Greece, make no mistake, it is a financial coup. It is not a bailout. It’s a takeover by force. The leader of Greece has obviously been told, and effectively has a gun to his head, the way it’s going to be. The Greek people voted for what they want, and we know what the Greek people’s wishes are, and they don’t want more austerity. They want to divorce themselves from the IMF and the European Central Bank (ECB). We know that clear as day, but that is not acceptable to the global elitists and the globalist bankers. They have said we don’t really care what you think. It’s going to be the way we say. The rest of Europe should sit up and take note of this because there are other countries whose finances are also not in good shape, namely, Portugal, Spain, France and Italy. . . . If global bankers are allowed to get away with this, then this is what you can expect in your country real soon.”–So, is Greece the template for other counties around the world with extreme debt problems? Kirby says, “This is very aggressive, and to suggest this is a template for what’s going to be done in other countries is sort of like saying a mugging has a template. Muggings are very aggressive, nasty acts, and when you are being mugged, you have fight or flight reflexes. When you get into a dustup with anyone, how it is going to end is anybody’s guess. . . . It seems to me the bankers will use anything at their disposal, including threats and including offing people. This is a very nasty, nasty game. What is at stake here is world domination.”–What do central bankers fear? Kirby says, “What is in danger here is the integrity of fiat money. All these bonds are expressed in fiat terms. The euro is a fiat currency, just like the US dollar is a fiat currency. The reason why they can’t allow Greece out of the euro is because the European Union is a construct of globalists whose ultimate goal is a one-world government with a one-world currency. The rationale goes something like this: If you can’t manage and keep together the Eurozone, how can you possibly rationalize one-world government and bringing the rest of the world onto this platform? So, they must keep Greece in the union; otherwise, it would expose their globalist plan for being threadbare as it truly is. And they can’t allow the default or the restructuring of the Greek debt because following closely on a Greek restructuring would be requests from, Portugal, Spain, Italy and France, as well. In my view, this is unworkable. In my view, this whole euro concept and whole notion of one-world government and one-world currency is a dog that will not hunt in the end. We are starting to see concrete proof that this is indeed the case.”–read more.

Strategic Investment Manager Warns Of Worldwide Financial Detonation: The Whole Thing Is Going To Blow Up by Mac Slavo, July 12th, 2015, SHTFplan.comThe seriousness of the global economic crisis cannot be underestimated. Central banks and their respective governments have gone into overdrive in recent months in an effort to maintain stability within the system. But as noted by one of the world’s most successful strategic investment managers, the financial crisis that is taking hold makes it clear that no matter what these institutions do they cannot control what’s to come.–Carlos Civelli, who has helped build a dozen billion dollar companies over his career, has a unique perspective on how current economic events and sentiment will affect everything from real estate and gold to equities and broader commodity markets. In his latest interview with Future Money Trends Civelli explains how Greece is just the fuse for a much larger and significantly more dangerous financial detonation: (top of post)–read more.

Is the Time Ripe for a New Global Reserve Currency? by http://www.financialsense.com/ China’s push for the adoption of a super-sovereign reserve currency points to a possible larger role for IMF’s Special Drawing Rights (SDR).–The current international monetary system is a historical exception. It has no anchor, such as the silver standard, the gold standard, or the Bretton Woods agreement.–Instead, a floating currency – the US dollar – accounts for the greatest share of foreign exchange reserves, amounting to more than $3.8 trillion, or 64% of allocated reserves (see chart below). Significant currency debasement by the Fed, and increasing prominence of other large economies, such as China, has raised questions in recent years about the justification of King Dollar’s rule.–Not All Sunshine and RosesBeing the supplier of the global reserve currency is not necessarily an enviable position. There is a fundamental tension between short-term national and long-term global monetary policy, known as the Triffin Dilemma. This paradox arises when the United States runs a trade deficit in order to provide the extra dollar-denominated liquidity demanded by foreign states and entities, which in turn results in higher consumption for American consumers.–In the long term, however, persistent trade deficits result in declining value and credibility of the reserve currency, making it less attractive as a store of value.–read more.

China wants to steal gold-market ‘reins’ from New York, London by Myra P. Saefong, http://www.marketwatch.com/China has been making it very clear that it wants more control over the global gold market, but it’ll have to go through New York and London first.–“Given that China is the epicenter of the physical gold market, it does make sense that the Chinese government would want its physical Shanghai gold market to supplant the Comex derivative market (and others) as the primary global price-setting mechanism,” said Anthem Blanchard, chief executive officer of online precious-metal retailer Anthem Vault.–China is, after all, the world’s largest producer and one of the biggest buyers of the metal, often running neck and neck with India as the globe’s top consumer.–Last month, the Bank of China became the first Chinese bank to join the group of lenders that set the London Bullion Market Association’s gold price benchmark, and two more Chinese banks are reportedly working to become members.–“This will allow Chinese banks to participate in the gold market on a global basis,” said Julian Phillips, founder of and contributor to GoldForecaster.com. –The LBMA Gold Price replaced the historic London Gold Fix in March. New York and London have generally been the hubs for setting gold prices. But with “so little gold going through Comex in physical terms, this is a distortion of demand and supply as it only reflects the trading picture of speculators in New York,” said Phillips. He noted that only 5% of contracts are delivered on Comex after notice has been given of this intention.–“Control over the gold price is exercised in New York and London, leaving China at the mercy of those two centers,” he said. So despite China’s huge presence in the physical market, it hasn’t had much control over the global gold price.–read more.

Published on Jul 10, 2015“Just like most of the products Americans buy are made in China, most of the economic problems the Chinese have are made in America,” says investment guru and radio host Peter Schiff, CEO of Euro Pacific Capital. “The Chinese have decided to peg their currency to the dollar and so they have imported our monetary policy.”–But as Schiff explained to Reason’s Matt Welch, that may be changing. China’s recent market woes may force China to change its monetary policy and Schiff believes the Chinese government is laying the groundwork to back its currency by gold. “Quietly they have been increasing thier ownership of gold,” says Schiff. “They want to untether their currency from the dollar but they don’t want it to be backed by nothing.”

China Is Laying the Groundwork for a Gold Standard Right Now by MIKE FINGER, http://schiffgold.com/ Ken Hoffman, Global Head of Metals & Mining Research with Bloomberg Intelligence, spoke with Kitco News about the possibility of China putting its yuan currency on a gold standard. Hoffman emphasized it is not difficult to imagine, because China has been laying the groundwork for years – buying up gold, starting a gold bank, building extra vaults, and soon launching a yuan gold fix. He believes the timing of it largely hinges on whether or not the International Monetary Fund decides to accept the yuan into its basket of reserve currencies this year.–
A gold standard, plain and simple, is not a big constraint on a currency. It actually is something that worked for hundreds, if not thousands of years. It’s not this horrible thing… [A Chinese gold standard] would be a game changer. It would make gold very interesting. It would make it a currency again in terms of the way the rest of the world looks at gold.”
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Highlights from the interview: “[China] wants to make the yuan international. The issue they have is they’ve issued a lot of yuan. If you were to just put it on a dollars-to-dollars basis how much money China has put out there, they have more money in the world than the US and Europe combined. The reason this doesn’t cause a lot of inflation is because the yuan isn’t internationalized. You can’t freely trade it, so they’ve been able to keep a lid on the value of the yuan. The question is if they are going to go and make this international, how do they back that currency so it doesn’t collapse? That leads us to at least consider: could they go on a gold standard? –read more.

Are Big Banks Using Derivatives To Suppress Bullion Prices? — Paul Craig Roberts and Dave Kranzler by Paul Craig Roberts and Dave Kranzler, http://www.paulcraigroberts.org/We have explained on a number of occasions how the Federal Reserve’s agents, the bullion banks (principally JPMorganChase, HSBC, and Scotia) sell uncovered shorts (“naked shorts”) on the Comex (gold futures market) in order to drive down an otherwise rising price of gold. By dumping so many uncovered short contracts into the futures market, an artificial increase in “paper gold” is created, and this increase in supply drives down the price.–This manipulation works because the hedge funds, the main purchasers of the short contracts, do not intend to take delivery of the gold represented by the contracts, settling instead in cash. This means that the banks who sold the uncovered contracts are never at risk from their inability to cover contracts in gold. At any given time, the amount of gold represented by the paper gold contracts (“open interest’) can exceed the actual amount of physical gold available for delivery, a situation that does not occur in other futures markets.–In other words, the gold and silver futures markets are not a place where people buy and sell gold and silver. These markets are places where people speculate on price direction and where hedge funds use gold futures to hedge other bets according to the various mathematical formulas that they use. The fact that bullion prices are determined in this paper, speculative market, and not in real physical markets where people sell and acquire physical bullion, is the reason the bullion banks can drive down the price of gold and silver even though the demand for the physical metal is rising.–For example last Tuesday the US Mint announced that it was sold out of the American Eagle one ounce silver coin. It is a contradiction of the law of supply and demand that demand is high, supply is low, and the price is falling. Such an economic anomaly can only be explained by manipulation of prices in a market where supply can be created by printing paper contracts.–Obviously fraud and price manipulation are at work, but no heads roll. The Federal Reserve and US Treasury support this fraud and manipulation, because the suppression of precious metal prices protects the value and status of the US dollar as the world’s reserve currency and prevents gold and silver from fulfilling their role as the transmission mechanism that warns of developing financial and economic troubles. The suppression of the rising gold price suppresses the warning signal and permits the continuation of financial market bubbles and Washington’s ability to impose sanctions on other world powers that are disadvantaged by not being a reserve currency.–It has come to our attention that over-the-counter (OTC) derivatives also play a role in price suppression and simultaneously serve to provide long positions for the bullion banks that disguise their manipulation of prices in the futures market.–read more.

Physical Silver Shortage EXPLODES! “We Are Looking at the Potential of 2008 Style PM Premiums” by http://www.silverdoctors.com/Everything has changed in the past 48 hours…Tuesday morning we warned that physical shortages and BIG jumps in physical silver premiums were imminent after 90% silver premiums had doubled in the past 48 hours. – Below is an update of the physical precious metals markets over the past 48 hours: – 90% premiums skyrocketed over the weekend after the Greek Referendum vote with availability nearly nill- wholesalers/distributors are now offering 90% silver in volume at up to $3 over spot, and supplies are rapidly vanishing. – Just before noon Tuesday, the US Mint advised Authorized Primary Dealers it had SOLD OUT of all Silver Eagle coins, and would be taking no further orders until approximately August, at which point it would begin rationing coins to Authorized Dealers. –Silver Eagle premiums instantly skyrocketed across the market, with premiums rising as high as $3.25 over spot/oz WHOLESALE / IN BULK – Between 4pm EST and 5pm EST on Tuesday 7/7, one of the largest Authorized Dealers sold through 250,000 Silver Eagles and raised premiums .50/oz further! –SDBullion broke all-time sales records Tuesday for order volume as well as total ounces sold- with demand FAR OUTPACING the Nov 5th 2014 bottom for gold and silver which had previously held both records. – Later in the afternoon, premiums began surging on Silver Maples and silver rounds and bars, and Authorized Dealers are advising that a production and premium hike announcement is expected imminently from the Royal Canadian Mint. – Wholesale premiums on many silver rounds and 10 and 100 oz bars HAVE DOUBLED in 48 hours. –SDBullion received a wholesale quote from one of the largest Authorized Dealers Wednesday for nearly $5/ozover spot for 5,000 oz of current year America The Beautiful Coins- a premium spike of over 100% in less than 24 hours! – Tuesday, the Sunshine Mint rounds and bars went from immediately available to production completely sold through August 13th in under 4 hours! – In many cases, physical silver is now MORE EXPENSIVE to acquire (on both a wholesale as well as retail level) after a $1/oz paper smash than it was prior to this week’s trip down the proverbial mine-shaft! – Wednesday the shortage began to spread to GOLD products. –read more.